Hospital's healthcare fee causes nothing but headaches

The arthritis in Jill Smith's knees can make walking unbearable. So she receives injections of an expensive pain medicine called Orthovisc once or twice a year.

It's not that Smith, 58, of Pacific Palisades, has problems with the $200 fee that her doctorat the Santa Monica Orthopaedic & Sports Medicine Group charges each time she comes in for her shots.

And it's not that she's even griping about the nearly $1,000 charged for the three doses of Orthovisc she requires per knee for each round of treatment.

What makes her joints creak is the $546 tacked on to her bill by St. John's Health Center to cover — well, that's not exactly clear.

"One time they said it was a 'facility fee,'" Smith recalled. "Another time, they said it was for the cost of the 'injection kit.' I'm not even sure what an injection kit is. Is it the syringe and a Band-Aid? That hardly seems worth $546."

I'm not even sure what an injection kit is. Is it the syringe and a Band-Aid? That hardly seems worth $546.— Jill Smith

The dubiousness of the charge becomes even more profound when you consider that the injections take only a few minutes. Sit down, get a shot, go home.

And, you may be asking, why is St. John's cutting itself in for a piece of the action? Smith's doctor isn't at the hospital.

If it were any other industry, we'd call this a rip-off. In healthcare, it's business as usual.

"Only in the Orwellian world of healthcare would anyone try to argue that fees like this make any sense," said Jerry Flanagan, lead staff attorney for Consumer Watchdog, a Santa Monica advocacy group.

CAPTION

This segment aired on the KTLA 5 Morning News on December 22, 2015

This segment aired on the KTLA 5 Morning News on December 22, 2015

CAPTION

This segment aired on the KTLA 5 Morning News on December 22, 2015

This segment aired on the KTLA 5 Morning News on December 22, 2015

CAPTION

This segment aired on the KTLA 5 Morning News on December 8, 2015.

This segment aired on the KTLA 5 Morning News on December 8, 2015.

CAPTION

This segment aired on the KTLA 5 Morning News on November 17, 2015.

This segment aired on the KTLA 5 Morning News on November 17, 2015.

CAPTION

This segment aired on the KTLA 5 Morning News on November 3, 2015.

This segment aired on the KTLA 5 Morning News on November 3, 2015.

CAPTION

This segment aired on the KTLA 5 Morning News on October 27, 2015.

This segment aired on the KTLA 5 Morning News on October 27, 2015.

Are such charges legal? Yup, say experts and the hospital. Are they justified? Not if you ask me.

The only thing about healthcare pricing that we can state with certainty is that Americans pay far more than citizens of other developed countries — typically twice as much.

And what we get in return isn't demonstrably better treatment. It's the headaches, confusion and frustration that come with what seems to be a deliberate effort to overcharge us.

After her latest round of shots in January, Smith said, she received the usual bills from Santa Monica Orthopaedic & Sports Medicine Group addressing the costs of her medication and her doctor's time in administering the injections.

"It's expensive, but my insurance covered most of it," she said.

Then Smith got an additional bill last month from St. John's Health Center. It said she owed $546 for what the bill identified as "drain/inject major joint."

"Drain?" Smith said. "Nobody drained my knee. I got a shot and they put on a Band-Aid. The whole thing took about five minutes."

St. John's Health Center was taken over by Providence Health & Services in March. Providence runs 31 hospitals in California and four other states.

Patricia Aidem, a Providence spokeswoman, acknowledged that what's now called Providence St. John's doesn't own the Santa Monica Orthopaedic & Sports Medicine Group. But she said the practice has a business relationship with St. John's.

"When an outpatient procedure such as this is performed in a hospital-affiliated clinic rather than in the physician office, a physician fee is charged as well as a fee for hospital services," Aidem said.

Smith said she contacted St. John's about half a dozen times after receiving her bill. The first time she called, she said, a service rep described the $546 charge as being for the operating room in which she received her shots.

"I was in the doctor's office," Smith told me.

The second time she called, a rep said the $546 was a facility fee, although he didn't explain what that meant.

The third time, she was told that the $546 was for her injection kit. And the fourth time, the rep offered a variation on this theme, saying she was charged a $273 injection fee per knee.

And then there was the bill itself, with its grandiose-sounding "drain/inject major joint," which is a pretty darn impressive way of saying that someone got a shot.

"This fee for the injection procedure was not a facility fee, and we apologize if Ms. Smith received inaccurate information when she questioned her bill," Aidem said. "The charge was a procedure fee, separate from the physician charges."

What's a procedure fee?

A procedure fee covers "personnel working at the facility, supplies and facilities," Aidem said.

And that's different from a facility fee?

"Yes. It goes beyond just overhead."

Like Smith, I was pretty much flummoxed by this point.

I've long argued that greater transparency is required in medical billing. If a hospital feels entitled to attach extra charges to people's bills, it should at least have the courage to clearly explain what it's doing.

"This is a long-standing problem," said Michael B. Nichol, a professor of health policy at USC's Price School of Public Policy. "You have to be a magician to decipher some of these costs."

Instead of a line saying "drain/inject major joint" in Smith's case, St. John's should have said, "Extra charge to cover things that probably had little to do with your treatment."

Healthcare regulators tolerate such charges, though I'm not sure why. But that doesn't mean they should give hospitals a free pass. Some sort of "truth in billing" rule seems more than warranted.

Smith finally threw in the towel. She said she'd pay the procedure fee or whatever it was, but she asked if she could negotiate a lower rate.

This was a smart move. Many hospitals will haggle over prices, but only if the patient brings it up.

"They said they don't negotiate," Smith said. "They said the $546 was the amount I'm responsible for."

Providence Health & Services describes itself as "a not-for-profit Catholic healthcare ministry committed to providing for the needs of the communities it serves — especially for those who are poor and vulnerable."

Apparently this healthcare ministry missed Sunday school the day doing unto others was taught.